RICE: I think the vice president was disappointed that in the second term we did a number of things with which he didn't agree.

(END VIDEO CLIP)

CROWLEY: And a holiday special, the best of our getting to know series.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, (D) CALIFORNIA: I didn't want to be a nun and I didn't want to be a congresswoman.

(END VIDEO CLIP0

CROWLEY: I'm Candy Crowley. And this is State of the Union.

The politics of the battle over the extension of the payroll tax goes something like this -- the president won, Republicans lost.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, SPEAKER OF THE HOUSE: Nay not have been the politically smartest thing in the world, but let me tell you what I think our members waged a good fight. We were able to come to an agreement.

(END VIDEO CLIP)

CROWLEY: Some Democrats suggest the payroll tax cut battle was a turning point for the president they feared had lost his spine, his magic and his chance for re-election. Republicans worry their Tea Party wing, which wanted to fight this one out has become a weight.

Earlier I spoke to one of the longest serving Republicans in the senate, Dick Lugar of Indiana, who faces a Tea Party challenge in his re-election bid.

(BEGIN VIDEOTAPE)

CROWLEY: Let me talk a little bit about this new deal that has been made for a two-month extension of the payroll tax cut. Here's something that Kevin Brady, who is a congressman from Texas, had to say.

"In the end, House Republicans felt like they were re-enacting the Alamo with no reinforcements and our friends shooting at us."

You were among the friends shooting at the House, saying pass this two-month thing, we need it done. Do you feel as though you undercut House -- particularly House Tea Party members who wanted to have this fight?

LUGAR: No, I don't think so. I think that Mitch McConnell, our senate leader, offered an avenue of approach that said this is a serious business, we ought to talk about a year solution, but this is not likely to be resolved in the next few days. In the meanwhile, wage earners all over America will see the tax holiday go, quite apart from those who are unemployed, on unemployment compensation, or the doctors in Medicare. In other words, the implications of this. So why don't we as a matter of fact talk for a period of time but do so after the first of January.

CROWLEY: But you know most people look at that and say good heavens. You've been talking about this for months and nothing got resolved. In fact, there's about a three or four-week discussion where nobody could come together on anything other than a two-month temporary fix.

What makes you think at the end of February you can get some kind of deal going?

LUGAR: I think it will be very difficult just as the committee of 12 found it was very difficult, even if the objective was to reduce the deficits and the problems of our balance payments. We just simply find this difficult to do in this context, but not impossible.

Now one factor that led the senate to come to a conclusion was the Keystone Pipeline. I offered legislation...

CROWLEY: Which is, just for our viewers, the pipeline from Canada down to Texas that would be built through Indiana, among other places, should create some jobs as they build it...

LUGAR: Well, at least 20,000 new jobs, $6.5 billion invested by the Canadians, and much more oil independence for the United States. A real winner. But President Obama, because of environmentalists surrounding the White House, apparently, had literally said we don't do anything until 2013. And I said that's unsatisfactory. You've got to make a decision in the next 60 days. And we attached that then to this holiday tax holiday.

Well, that did light up some Republicans who said, by golly, we do need to do this. And as a matter of fact, Democrats said we need it, too. In other words, there are ways sometimes where the thing that's insoluble but that you inject other elements and they're good for the country.

CROWLEY: Let me ask you though about the pipeline, just a quick question. There is concern that a lot of this oil though -- sounds to me, oh, good, we'd be more oil independent -- but that a lot of it will get shipped overseas. Is there a legislative fix for that? Do you worry about that?

LUGAR: No, I don't worry about it. As a matter of fact, we're already sending refined oil overseas and we are getting a balance...

CROWLEY: Well, one of the selling points is independence seems counterproductive to them sending it overseas.

LUGAR: Well, not exact because we still have the Canadian oil. In other words it is our option as to whether we need it in the United States or whether we can make a sale in terms of our balance of payments.

The other option is the Canadians will ship it to China. We won't have that option. We're then back into the stew again.

CROWLEY: You have -- let me switch you a little bit to politics here. You have, among other challengers, a Tea Party candidate who would like go into the primary and to be the U.S. senator from Indiana. What do you think in general of the Tea Party and its effect first on legislation and its effect on politics?

LUGAR: Well, the Tea Party groups have been very effective. In Indiana, they are separate groups usually by community, as opposed to one large situation. They are very conservative Republicans. They believe in less government spending, less government, period. And they are hopeful of finding candidates who are going to be on that ticket.

CROWLEY: They think that's not you.

LUGAR: Well, I would say to them respectfully, it is me, that I have a very conservative voting record over the course of the time I've served. I'm certainly unique, I think, in the senate of having been a farmer, a small businessman, a naval officer, a mayor, a school board member -- these are grassroots functions...

CROWLEY: Do you think this is something you should have to be selling to Republicans in Indiana at this point?

LUGAR: It's not my option. CROWLEY: I know it's probably not your preference, but you've been in congress more than 30 years, and something has changed in the atmospherics, I think, of politics that makes you I think it was the Washington Times called you one of the most vulnerable Republicans. How did that happen?

LUGAR: Well, I'm not certain I'm most vulnerable. I'm not certain it's happened. In other words, I would just say that our campaign has already enlisted hundreds of volunteers from all the backgrounds that I've talked about. We've made 517,000 calls already just to the spectrum of people who might vote in the Republican primary. They put about $4 million in the bank for me through very good fundraising at the grassroots level. I have visited with many Tea Party groups. They've not pledged support, but they understand my position, and some even are going to be voting for me.

The point I'm trying to make is that I think it is useful to understand a Republican majority in the senate is very important. And Republicans who are running for re-election ought to be supported by people who want to see that majority. And so I think the majority of Tea Party people understand that, too. What they're hopeful is...

CROWLEY: Just so I know what you mean, is you think that you have the best chance of keeping this seat Republican and that's what you're arguing?

LUGAR: Yes, no doubt from all of our polling and understanding that that is the case, and that as a matter of fact, if I was not the nominee, it might be lost. That I think is important, whether it is Tea Party or anybody else to understand, because Republicans lost the seat before in Nevada and New Jersey, for example, and Colorado. There were people who claim that they wanted somebody who was more of their Tea Party aspect, but in doing so they killed of the Republican chances for majority.

This is one of the reasons we have a minority in the Senate right now.

CROWLEY: Senator Lugar, I want to ask you to stand by here.

Coming up, the future of North Korea. Has the death of Kim Jong- Il changed anything? Our conversation with Senator Lugar continues.

(COMMERCIAL BREAK)

CROWLEY: We are back with Republican Senator Dick Lugar.

Senator, I want to play you something from Congressman Ron Paul, who, as you know, is a member of the Republican Party and is currently leading in the polls in Iowa. This is specifically on foreign policy.

(BEGIN VIDEO CLIP)

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: I think we concentrate too much on the borders between Afghanistan and Pakistan than we do on our own borders. I think it is time we worry about our own borders and not so much overseas.

Every year we spend more and more money overseas. We spend it on foreign aid and intervention, propping up dictators, fighting wars that we don't need to be fighting, and they drain these reserves funds.

There's no authority in the Constitution to be the policemen of the world and no nation-building.

(END VIDEO CLIP)

CROWLEY: Is that a Republican Party message? LUGAR: Well, it is one Republican's message.

CROWLEY: Is that the bulk of the Republican Party message, do you think?

LUGAR: No, of course not. And it is not a message which really a president of the United States could ever afford to extend. In other words, we're a party and a president of leadership, leadership in the world. We have a fleet that covers all the seas, as a matter of fact, makes foreign trade possible, trade of all sorts.

We're the only country that can go everywhere all over the world, and therefore indispensable to our allies as well as to our own interests. These are very, very important parts of our national strength and they involve foreign policy, they involve armed forces, and a combination of these.

Now some presidents are more skillful than others in utilizing these. Some Congress is maybe more skillful in determining which conflicts or what kind of aid we ought to have.

But still, to roundly condemn foreign aid or the fact that we are concerned about borders in Afghanistan and Pakistan and what have you seems to me is really uncalled for.

CROWLEY: Before we leave politics, are you a Romney guy?

LUGAR: I've not made a commitment to any of the candidates.

CROWLEY: Are you leaning one way or the other?

LUGAR: I favored Mitch Daniels, the governor of Indiana.

CROWLEY: That's well done. He says no.

LUGAR: I understand. But nevertheless, I think he would have been a great president.

CROWLEY: Let me move you on because so much has happened. First of all, the death of Kim Jong-il, president of North Korea, what does that mean for the U.S.? Make that important to a viewer.

LUGAR: It means that we're going to have a different relationship, probably, with China. And it all depends. And the Chinese will have to make a determination whether they are going to treat North Korea as a province of China or whether as a matter of fact they're going to be concerned about the drain upon their own resources, the potential really of North Koreans crossing the border.

And the same with the South Koreans. The Chinese policy has been to keep two Koreas. But at the same time, if this doesn't work out for them, we may have a difference in which North Koreans want to come into South Korea.

In any event, North Korea is a dramatically difficult state because of the deficit, the economy, quite apart from the transition of leadership.

CROWLEY: What worries you about this transitional period? What do you fear most while we try to figure out and while they try to figure out really what's going on in North Korea?

LUGAR: That something might happen to their nuclear material or their nuclear weapons, the loose nuke problem. Now some in the country might try to sell this to others because of the economic crisis that they have.

CROWLEY: Is there anything we can do about that?

LUGAR: Well, there had better be. And that would be certainly one of the missions that I would be most concerned about, tracking as best we can precisely happens with regard to the nuclear element while we're trying to negotiate with them to get rid of all of it.

But now if you ask me what the worst thing that could occur, it is in the chaos of anarchy in North Korea. It is the same thing on a smaller level we're trying to track down MANPAD missiles in Libya with people -- with the militias or what have you.

CROWLEY: Which we're not doing very well, right.

LUGAR: Well, we had better do better because all of us are in jeopardy, everybody who flies an aircraft anywhere in the world with a MANPAD situation.

CROWLEY: And finally, let me just ask you quickly about Iraq. Since the U.S. left, there have been numerous bomb blasts, particularly in the Baghdad area. Do you think al-Maliki is capable of keeping his country together? Do you fear that it falls apart and under Iranian influence?

LUGAR: I don't think it will fall apart but I fear that there will be continued clashes between Shiites and Sunnis and that the Kurds in the northern parts will be less and less affiliated with the other two.

That is not good news for Iraq, it is not good news for the whole neighborhood. We don't know what the ties might be with Iran, for example, quite apart from other fallout that may come from this.

Now so for the moment we're hopeful that the al-Maliki government will hold together. They were duly elected, free and fair elections. But democracy doesn't always bring about a situation of people that know how to govern the country or who have given up the old wars between the Shiites and Sunnis.

CROWLEY: In fact the Shiites and Sunnis in conflict is kind of where we started during this war, didn't we? And the Kurds...

LUGAR: Well, it has been going on for decades.

CROWLEY: Forever. So that's one thing that hasn't changed. But we are out. Senator Richard Lugar, we wish you a merry Christmas... LUGAR: Merry Christmas, Candy.

CROWLEY: ... happy New Year.

LUGAR: Great to be with you.

CROWLEY: Thank you so much for joining us.

After the break our political panel prepares us for some chilly Iowa campaign politics, stay tuned.

(COMMERCIAL BREAK)

CROWLEY: Here to prepare us for the upcoming campaign year, A.B. Stoddard, columnist for "The Hill" newspaper, and Ron Brownstein, CNN senior political analyst and editorial director of the National Journal Group.

Well, I'm getting excited now, because the polls are so -- a little bit everywhere in Iowa, so much so that I want to play you something Newt Gingrich said a little earlier in the week.

(BEGIN VIDEO CLIP)

FORMER REP. NEWT GINGRICH, R-GA., PRESIDENTIAL CANDIDATE: My goal is to be in the top three or four -- and you can't tell because it is very bunched right now on the sheer weight of money. To be in the top three or four -- I'd love to win, but to be in the top three or four --

(END VIDEO CLIP)

CROWLEY: Is the top three or four good enough for Newt Gingrich in Iowa?

A.B. STODDARD, COLUMNIST, "THE HILL": I don't think so, Candy. I think Newt Gingrich has to make a very strong showing in Iowa to build momentum to get the money behind him, to get the bodies on the ground for the fights in the early states that follow.

New Hampshire is not really going to be his state. He needs to have a strong showing in South Carolina and he needs the boost from Iowa. Right now if Ron Paul were to win and Gingrich were to come in second, he could call that a win, write off Ron Paul. But three or four is not going to do it. He needs to consolidate the anti-Romney vote. He needs -- every vote he loses to Ron Paul, Michele Bachmann or Rick Santorum is a vote lost and I think really slows him down for the long run.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: You know, that's exactly right. I agree. You know, in politics things are true till they're no longer true. But having said that, since South Carolina moved up its primary in 1980, every contested Republican race has followed the same pattern.

One candidate won Iowa, a different candidate won New Hampshire. One of the two won South Carolina and that person wins the nomination. So if...

CROWLEY: The firewall.

BROWNSTEIN: The firewall. If Gingrich or Rick Perry or Michele Bachmann or someone with the potential to grow beyond the kind of niche that Ron Paul has, if one of those don't win Iowa, given Romney's strength in New Hampshire, anybody else in the field could be looking at a very uphill climb.

I mean, you know, that has been the pattern. You need one of those two to get the launch to carry you forward.

CROWLEY: Well, I was going to say, we've seen -- I've seen a lot of columnists and articles, people saying this could be a really long campaign for the GOP. It could be like the for the Democrats last time, we'll be in June still deciding. And I think, boy, if Mitt Romney comes in, pulls off a surprise in Iowa and New Hampshire, isn't it kind of done?

STODDARD: It probably is. Ron is probably right, then he could probably win South Carolina and move on and be done. But he is prepared for the long -- for the long race, not only organizationally, but he has the money.

He also knows that the rules changes have provided for a longer campaign this time. By the end of February, fewer than 20 percent of the delegates will have been allotted. This is going to be a long fight. So if Gingrich has a great January, Mitt Romney can still hang on in this fight.

BROWNSTEIN: You know, no one has won a Republican race, Iowa and New Hampshire in the same year, since Gerald Ford in '76. And the reason is they're almost mirror image constituencies. Iowa's so socially conservative, New Hampshire more libertarian, more upscale.

But if Iowa does not -- if Iowa does not provide a boost to someone who has a broader potential than Paul, as I said, it's a very difficult situation for anyone to overcome Romney. It's ironic, Romney only won 20 percent of Iowa evangelicals in 2008. He's probably not going to do much better this time.

But if they don't coalesce behind a candidate who really has the capacity to stop him, they may, in effect, give him the pathway to the nomination if they continue to fragment.

CROWLEY: And, you know, it seems to me that one of the strange things about this then is what you're saying, in a nutshell, is a Ron Paul win in Iowa is great for Romney.

BROWNSTEIN: I think it is because Ron Paul has a -- you know, Ron Paul has floor and he has a ceiling. And the two look very much alike. I mean, there's a little space between them, but there is a limit on how much he can grow.

And I think unless Iowa propels forward one or the other candidates who does have the potential to build a broader coalition -- and what we saw with Newt Gingrich when he was doing well was he was attracting support from both wings of the party, the Tea Party side and the more pragmatic side.

But if someone like that can't get a launch, then it becomes much more difficult. You have to just make, A, a start. You have to go into South Carolina without winning Iowa and New Hampshire and make a stand there and beat Romney at that point.

CROWLEY: If a candidate coming out of Iowa is not in the top three, which of those candidates are done? Santorum?

STODDARD: Oh, yes, I think so. And I think Michele Bachmann probably as well. I don't Rick Perry's going to do well in Iowa. It is -- I think it's really his final curtain call. He has to come in and do well.

I think it 's -- I think it's really going to come down to a Gingrich-Romney race, but I think that, you know, Ron's right. It's so muddled that any strong showing by Ron Paul weakens Gingrich and just helps Mitt Romney.

CROWLEY: And then we should add that polls don't necessarily tell us what's going to happen on caucus night. It's really hard to translate a poll into a caucus.

BROWNSTEIN: Real quick, given the prevalence of evangelicals in South Carolina, 60 percent of the electorate in '08, the same as in Iowa, it's likely Perry, Bachmann and Santorum, even if they lose, do poorly in Iowa, will try to struggle on to South Carolina. But the history is that those candidates, you know, don't have the viability they think.

I once compared them to Bruce Willis in "The Sixth Sense" -- they're dead, but they're only one who doesn't know it. They just kind of keep going through the motions in South Carolina. I think we'd see that, but it's unlikely to have much impact.

CROWLEY: OK. Any surprises you see coming in Iowa? Or is it just going to be a surprise for...?

BROWNSTEIN: Yes.

STODDARD: I think Rick Santorum could surprise. I think he's put in the work on the ground that it takes. And he could be -- he would be my guess for a surprise. Voters who appreciate -- socially conservative voters who appreciate the endorsement of Bob Vander Plaats and decide that Rick Santorum has a better shot --

CROWLEY: He certainly is a social conservative --

STODDARD: ... a very influential conservative leader who gave him a boost by endorsing him. And I think that Rick Santorum has --

CROWLEY: And he's trying to get everybody else out of the race for the --

BROWNSTEIN: Exactly that reason --

CROWLEY: -- talking about.

BROWNSTEIN: I mean, the surprise in Iowa will be if the big evangelical, socially conservative bloc that is dubious of Romney can consolidate to a greater extent than they appear now, because if they don't, they have the risk of elevating the candidate they are the most skeptical about.

CROWLEY: But in Iowa, you can -- that could happen.

BROWNSTEIN: That could happen.

CROWLEY: You know, because there's a number one, a number two, and then you see that your candidate's not going to win; you got to pick somebody else --

BROWNSTEIN: Not on the Republican side. The Republican side is a straw poll.

CROWLEY: Oh, that's right, that's right --

(CROSSTALK)

BROWNSTEIN: It's a Democrat (inaudible). But it is -- but you have that phenomenon really going on in this last two weeks, I think. I think people will be looking in the mirror and saying, you know --

CROWLEY: Do we want to do this?

BROWNSTEIN: -- do we want to do this, because they do have the potential, as we say, I mean, to really make this a lot easier for Romney if they don't consolidate behind one candidate who has a realistic chance of building a broad-enough coalition to stop him.

CROWLEY: Let me broaden out the subject to whoever is going to run against President Obama.

There was a new CNN/ORC poll out this week, registered voters' choice in 2012, pitting President Obama against Mitt Romney -- 52 percent Barack Obama, 45 percent Mitt Romney, outside -- 45 -- so it's a seven-point difference -- and the exact same difference when you pit Barack Obama against Ron Paul. You and I had the same reaction to this poll. It almost doesn't matter that Ron Paul and Mitt Romney appear to have the same chance. What matters is where the president is.

BROWNSTEIN: Right. Well, this, is -- look, this is the best scenario for the president. This poll is a replay of 2008, where he was at 52.8 percent of the vote, the most for any Democrat since Johnson in '64.

It is an unusually good poll for him. I mean, I think the approval rating is probably the best indicator of where an incumbent president actually stands. Generally he's been stuck around 45-46 percent, which indicates a very tough race. He has seen an uptick, though. Recently, as he's framed this contrast with Republicans over the payroll tax fight, he has moved closer to 49 percent.

If he can stay in that range, then he's in a much stronger position. The question is whether he gets enough economic growth to kind of hover around 50 percent, or whether dissatisfaction pushes him down a little bit and makes this much tougher.

CROWLEY: In fact, A.B., we are now seeing some Democrats thinking that the battle over the payroll tax deduction was a turning point. They see that as a -- you know, like when Newt Gingrich --

(CROSSTALK)

CROWLEY: ... sort of like the shutdown of the government in '96. This is where the president and the Democrats turned it around and everything's going to be great.

STODDARD: Well, first of all, we're obviously -- he's going to be running for re-election, President Obama is, in a terrible economy, and he's trying to break with history to get re-elected in the unemployment we expect next August, September, October, November.

The Democrats are right; this could be the beginning. If John Boehner and his House Republicans continue a record of brinksmanship and chaos and not a record of governing, it -- throughout 2012, they are correct, this could be the beginning of when the tide turns. The president has won his base back. That's why his numbers are coming back. But if Mitt Romney is the nominee and runs against the congressional Republicans in Washington and the do-nothing dysfunction and the economy is in the tank, still hard for President Obama to hold that over 50 percent.

BROWNSTEIN: Bill Clinton in '96 had the tailwind of an improving economy. He got over 50 percent of approval after that shutdown, never went below it, never trailed Bob Dole. Again, we'll have to see whether Obama gets that extra boost that helped Clinton of an approving economy.

When we come back, Condoleezza Rice reflects on the Bush legacy in Iraq.

(COMMERCIAL BREAK)

CROWLEY: It is over. and after almost more than nine years, we know the cost to Iraq: nearly 4,500 U.S. military deaths, more than 32,000 U.S. wounded, and 100,000 Iraqi military and civilian deaths, $800 billion-plus, and still counting. Now with American troops out and violence in Iraq up, what we don't know is whether the U.S. ever should have gone there in the first place. Do not look for second-guessing on that point within the Bush administration.

Former Secretary of State Condoleezza Rice was on book tour recently. When we sat down to discuss Iraq policy and the people who made it.

(BEGIN VIDEOTAPE)

CROWLEY: Let me ask you, there's so much frustration I think among reporters and the public, some of the public, that when a former Bush administration official comes out, there's nothing that they see that was done that they think was the wrong thing to do, or maybe it was for a reason that didn't exist with Saddam Hussein, but it was still a good war to conduct and et cetera, et cetera.

So let me ask you a broader question, because I know you won't come off that point -- you did what you thought was right at the time and you haven't changed it. And I understand that. The question I think, though, is if you look back, would you like a do-over on anything?

RICE: Oh, I'd love do-overs on several things. But on Iraq I would like to look differently at how we tried to rebuild the country. Overthrow of Saddam was done brilliantly but frankly looking back I don't think we thought enough about how to build the provinces and use the tribal networks...

CROWLEY: Once Saddam Hussein was gone.

RICE: You didn't think there were enough enough troops there.

RICE: And ultimately there weren't enough troops there, which is why the surge was important, but interestingly, I think the thing that I'd most like to do over is some of the aspects of the relationship with Mexico. I think that one of the casualties of the preoccupation that was a necessary preoccupation after 9/11 on securing ourselves and Afghanistan and Iraq, the relationship with Mexico which had great promise given the two governors, Vicente Fox and George W. Bush who came to power together to do something maybe earlier about the terrible border troubles that we now know are in Mexico with the drug cartels, to do something about immigration reform.

It was 2007 when we finally got to immigration reform. Jon Kyl, John McCain, Teddy Kennedy, George Bush wanted a bill. They couldn't get it through. I think immigration reform is still one of our really great problems and now the states are doing a patchwork of immigration laws.

So that's probably the one I'd do over most quickly, if I could.

CROWLEY: Has there ever been a night -- is there a night now -- I know I don't have to tell you how many Americans have been killed in the Iraq invasion, in the Afghanistan effort. Hundreds of billions of dollars. So many young men and women coming back either physically or mentally challenged. Do you ever think, I don't know -- was it worth it? Did we get enough for what we gave?

RICE: Well, clearly one never gets over the lives that are lost and the lives that were changed. And I talk about that some in the book. But nothing of value's ever won without sacrifice either. And from the day that you walk into a course of international politics you are told the Middle East is the most volatile region in the world. And Saddam Hussein was a cancer in that most volatile region. He was...

CROWLEY: But it is still volatile and he's been gone for ten years.

RICE: It's volatile but it doesn't have us sitting here, Candy, talking about an arms race between Ahmadinejad's Iran and Saddam's Hussein's Iraq.

CROWLEY: No. We're just talking about Iran having a nuclear bomb.

RICE: No, but just imagine if Iran were moving towards its nuclear weapon and Saddam Hussein, with all that infrastructure in place, and his insatiable desire to have weapons of mass destruction, I think we would be talking about a very different situation in the Middle East.

CROWLEY: You know, I think what I'm trying to get to here -- and I know you've heard it and felt it at least -- is that there was always the feeling among the critics of the Bush administration and the policy of the Bush administration, in Iraq in particular, that you all were just so convinced we should go do this that you didn't care about what the price was going to be...

RICE: Well that's simply not true, Candy. Anybody who is the president of the United States does not want to send men and women into war.

CROWLEY: It was a high price, you would agree with that.

RICE: We paid a high price. But when you have a security threat -- and Saddam Hussein had been a security threat since the late 1980s. We had been to war against him in 1991. We tried to contain him. Containment was indeed breaking down, including in the oil-for-food program, which turned out to be one big scandal that was helping him. We didn't see another option. I write in the book about other things that we tried. The Egyptian's said he'll take $1 billion to leave. The president said done. Now that would have been another problem but we were prepared to do it.

We tried to kill him at Dora Farms the night before the war began to prevent a war. So the idea that somehow people want to go to war is, frankly, insulting. And so you go to war when you think that there is a security threat that is materializing, when you've had the experience of 9/11 where you let a security threat materialize in Afghanistan that then came back to haunt you. That's why we went to war.

And I believe that Iraq is a better place without Saddam Hussein and the Middle East is a better place.

CROWLEY: Let me just ask you a couple of personnel questions, personal personnel questions. You've had well-documented disagreements between -- with both Vice President Cheney and Secretary of Defense Rumsfeld.

It is interesting to me that in the book, and in all the interviews you've done since, you don't ever look at this and think it might have been a gender problem or a race problem. You honestly think that they weren't dismissing you in any way because of race or gender. You think this was a flat-out policy.

RICE: Well, remember, I had worked with both of these people before. Don Rumsfeld had been a major champion of my career. I had worked with Dick Cheney when he was defense secretary and I was on the National Security Council.

And I would say to people, look, when I was national security adviser, it is a position in which are you coordinating, you are the honest broker, you are putting forward the views of others so the president can decide.

When I became secretary of state, I carried a different kind of weight.

CROWLEY: You were more powerful.

RICE: And I had no trouble playing that role because I was female and black. I'd been the same female and black person as national security adviser. And so if you do the controlled experiment, I don't think race and gender are much of an explanation here.

I think what you are dealing with is people with strong views with differences, policy differences, not personal ones. And to the degree that when people are under pressure, personalities are a little bit more than they otherwise might be. Maybe there was a little bit of that, too.

CROWLEY: You have described Donald Rumsfeld, the former defense secretary, as a grumpy friend. How would you describe your relationship with Vice President Cheney?

RICE: Well, I think it was respectful. And I...

(CROSSTALK)

RICE: Not really. You know, we disagreed but we were able to disagree in a respectful way. I think the vice president was disappointed that in the second term we did a number of things with which he didn't agree.

The president decided to really give diplomacy an all-out try. Yes, sometimes you don't win in using the diplomacy in that way, but, for instance on North Korea, we didn't really have a military option with North Korea. We needed the Chinese and the South Koreans and the Russians and the Japanese.

And so diplomacy was the course that we chose. I think the vice president didn't always agree.

CROWLEY: Coming up, childhood dreams, catfish noodling, and Elvis. The other side of some of our biggest newsmakers next.

(COMMERCIAL BREAK)

CROWLEY: To be honest, it's one of our favorite things on the STATE OF THE UNION Web site, a time for newsmakers to get personal, a place for you to learn more about the people who come into your living room every Sunday morning. We've got a sack filled with the best of our series, "Getting to Know."

(BEGIN VIDEOTAPE)

CROWLEY: We've been mispronouncing your name all these years.

COLIN POWELL, FORMER SECRETARY OF STATE: I was baptized Colin. My parents were British subjects originally, so that was the pronunciation of the name, correctly, they thought.

But as a young boy, growing up in the South Bronx section of New York in the early days of World War II, there was a famous hero, Colin Kelly, his name was, and that's how they pronounced it. It's an Irish variation.

And I lived on Kelly Street, as well. So as I grew up, the kids on the block started calling me "Ko-lin" after this famous World War II hero. And I grew up using both names: "Kah-lin" in the family, "Ko-lin" with my friends.

Nobody cared until I became national security adviser. And then you guys, the media, insisted that I pick one or the other.

REP. PAUL RYAN (R), WISCONSIN: My wife is from southern Oklahoma, and down there in southern Oklahoma, they have a sport where during spawning season for catfish you go along the riverbanks, we do this in Lake Texoma, down there on the Illinois -- I mean, on the Oklahoma-Texas border. And you put your hand in the hole where the catfish is spawning, they bite down on your hand, and then you pull the catfish out of the hole. So you're just basically catching catfish by hand. It's really exhilarating. It's actually quite fun.

DICK CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES: I had been less than a diligent student. After two years I was asked to leave Yale. I went out and built power line transmission lines, and twice within a year I ended up arrested for driving under the influence. The second time was Rock Springs, and it was a wake-up moment, obviously.

I decided that if I stayed on the road I was on, I was going to come to a bad end. So out of that experience I decided to go back to school, see what I could do by way of grades and so forth, got married a year a later and shaped up, basically.

CROWLEY: From shaping up to growing up, in this year's presidential race and every campaign before it, there is always talk about the disconnect between politicians and real people. Still, even people living inside the Washington bubble or a governor's mansion were kids once, and like any kid, they had dreams

REP. JOHN LEWIS (D), GEORGIA: As a young child I wanted to be a minister. I wanted to preach the Gospel. So from time to time we would gather all of our chickens together in the chicken yard, and my brothers and sisters and cousins would line the outside around the chicken yard. And I would start speaking and preaching.

And I tell young people today, some of those chickens bow their head, some of those chickens shake their head, they never quite say amen.

TIM PAWLENTY (R), FORMER PRESIDENTIAL CANDIDATE: I wanted to be a dentist because when I was young I grew up in modest circumstance. But my dentist used to park, I think, a Buick Riviera in his reserved parking spot. And I remember going to the dentist and looking at that car going, wow, that must be the path to the American dream, being a dentist.

CROWLEY: I also read, and you can tell if this is true or not, that your mother actually wanted you to be a nun.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Oh definitely.

CROWLEY: So I want to know from your perspective if that was ever a true consideration of yours?

PELOSI: No. No, it wasn't. I didn't want to be a nun. And I didn't want to be a congresswoman.

CROWLEY: We also found with our newsmakers that no matter where they came from or how high they've climbed, meeting royalty of one kind or another leaves lasting impressions.

William and Kate were here? You greeted them? GOV. JERRY BROWN (D), CALIFORNIA: Yes, I did.

CROWLEY: You also three decades ago greeted Prince Charles.

BROWN: I did. I received him in Sacramento, and then I went later to Buckingham Palace, so.

CROWLEY: Who is it easier to hold a conversation with? BROWN: Well, I would say conversing with royalty is an experience all its own. So I would say they are charming, they are proper, and they're British royalty. It's -- I enjoyed meeting with them.

SEN. KAY BAILEY HUTCHISON (R), TEXAS: When Elvis was coming to the Houston rodeo, I asked my news director to cover Elvis because I just thought that was the greatest thing that I could ever cover. And I got to do it.

CROWLEY: You met Elvis when you both were serving in the military?

POWELL: 1959. He was a sergeant in the 3rd Armored Division, and I was a lieutenant in the 3rd Armored Division. And I got to meet him in the field once or twice. And he was just an average soldier. He did his job. He was drafted. And he was seen as an excellent soldier.

CROWLEY: I mean, he was already a big deal when he was in.

POWELL: He was a big deal. He was at the height of his success when he was drafted. And he went and he did his two years. He lived very well when he wasn't in the barracks, I might add, in Germany. But then he came back and took up his career again and became even more famous.

CROWLEY: Did he ever sing for you?

POWELL: No.

CROWLEY: Just thought I'd ask.

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CROWLEY: When we come back, more snippets from our "Getting to Know" series, including what gave a genuine civil rights hero the strength to keep fighting.

(COMMERCIAL BREAK)

CROWLEY: Lots of the stories we hear wow in getting to know make us laugh and some are surprising and others just wow us with their power. Well, the first black president sits in the White House, some prominent newsmakers shared experiences that reminded us of just how recent and how personal the struggle for equality was

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CROWLEY: We read that you cut your own hair.

HERMAN CAIN: Yes.

CROWLEY: Is that still true?

CAIN: Candy, that is still true. It goes back to when I first started working for the Department of the Navy as a ballistics analyst. I drove to Fredericksburg, Virginia, found the barber shop. Went into the barber shop. They had all black barbers. I'm going, eureka. I found me a barber shop. I sat there because in the south the tradition is wait until the barber says "next." And it was first come, first serve. I sat there and sat there, and they kept calling the other customers who were white.

Finally, I walked up to one of the barbers and I said, excuse me, sir but wasn't I next? He said, I'm sorry, but we don't cut black hair in here.

I said, you have all black barbers.

If we cut your hair, we will not have a job.

I said, okay. I'm in Fredericksburg, Virginia, 70 miles south of Washington, D.C. and that was somewhat of a shock.

And then he said, but there's a black barber shop over on the other side of the tracks, past Sears and Roebuck.

I went to Sears and Roebuck, bought me a set of clippers, and I have been cutting my own hair since.

RICE: My dad went to vote with my mother. They were not yet married, but they went to vote. My mother was fair skinned, very pretty. And there was something called a poll test in those days. And the poll testers said, so who, who's the president of the United States.

And my mother said, George Washington. He said, fine, you can vote.

Then he turned to my father, big man, rather dark skinned. And he said, how many beans are in this jar. And it was obviously impossible to count.

So my father went back to talk to an old man in his church. And Mr. Frank Connor he said, oh, reverend, he said don't worry. I'll show you how to get registered. He said, there's a clerk down there, she's a Republican. And she's trying to build the party. And she will register anybody who will say they're a Republican. This was in the days of very few Republicans in the south.

CROWLEY: In the south.

RICE: And so he went down. She registered him. He never forgot it. He became a member of the Grand Old Party and stayed...

CROWLEY: And here you are.

RICE: And here I am. Here I am.

CROWLEY: During your time as a civil rights leader, I thought this was a great question, you were beaten, you received death threats. What kept you going? Was there a moment when you thought this is to much for one person to bear?

JOHN LEWIS, FRIEND OF MARTIN LUTHER KING, JR.: I think part of my reason for keeping moving is my faith in the future. It's going to get better. It's all going to work out. I never, ever thought about giving up or quitting or -- I couldn't do that. It's not part of me. It's not part of my DNA that I feel like I must continue to be in the arena, to be there, to be pushing. And to try to inspire other young people.

(END VIDEOTAPE)

CROWLEY: Put us down as inspired.

Enjoy your Christmas Day, and happy holidays to everyone from all of us at State of the Union. I'm Candy Crowley in Washington.

Join us next week when we'll be live from Iowa to give you an in- depth preview of the January 3 caucuses.

But up next for our viewers here in the United States, a check of the top stories and then Fareed Zakaria GPS.